The Impact of Wage Increases on Job Satisfaction - Empirical Evidence and Theoretical Implications

Christian Grund and Dirk Sliwka

No 387, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The impact of wage increases on job satisfaction is explored. First, it is empirically established that current job satisfaction rises with absolute wage level as well as with wage increases. Second, a basic job satisfaction function is constructed based on the empirical results, and theoretical implications are analysed. It is shown that the myopic maximisation of such a function directly implies increasing and concave shaped age-earnings profiles.

Keywords: age-earnings profiles; Job satisfaction; wage increases; habit formation (search for similar items in EconPapers)
JEL-codes: J28 J30 M12 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2001-11
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (19)

Published - completely revised version published as IZA DP No. 1879

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